Singapore’s telecom sector ended 2016 with lacklustre earnings as only Singtel reported in-line 9MFY17 results while Starhub and M1 missed expectations for its FY16 results. All three telcos reported decline in EBITDA, mainly due to intensifying mobile business in Singapore, especially for the latter two telcos. Looking ahead, we believe with TPG expected to launch mobile services in CY18, competition within Singapore’s mobile industry is set to intensify as incumbents will likely take actions so as to gain market share during this period. We also expect TPG to start offering fibre broadband services before the launch of its mobile services. Consequently, we believe competition is set to heightened and forecast for average revenue per user (ARPU) to decline by 11-16% over the next five years. Hence, we downgrade M1 from HOLD to SELL with a lower FV of S$1.75, and maintain SELL on Starhub on lower FV of S$2.50. That said, we remain positive over Singtel’s longterm outlook given its growing presence in cyber security segment, and exposure to regional mobile associates. Hence, we reiterate Singtel as our top pick within the sector with a BUY rating with FV of S$4.25. Maintain NEUTRAL on the Telecom sector.